QNB: Emerging Markets Continue to Suffer from QE Tapering

Since the announcement by the US Federal Reserve (Fed) of the gradual reduction of its asset-purchasing program—the so-called tapering of Quantitative Easing (QE)—emerging markets (EMs) have witnessed large capital outflows, a strong weakening of their currencies and reduced growth prospects. These negative trends are unfortunately expected to continue in 2014 with the Fed’s implementation of QE tapering, leading to lower economic growth, tighter macroeconomic policies and possible disruptions in the balance of payments (BOP) of selected countries.